EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1118576
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Powers Fasteners applied for a TCO in respect of certain screws on 10 June 2011.
Instrument
TCO No 1118576 was made on 02 November 2011. It declares that those certain screws are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1118576 is taken to have come into force on 10 June 2011.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 1118576, enacted under the Customs Act 1901, was introduced to address the specific need for tariff concessions on certain goods, in this case certain screws. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on specified goods. The problem or gap that this legislation aims to fill is the potential economic disadvantage faced by businesses if they cannot obtain necessary goods at a reduced tariff rate, particularly when these goods are not produced domestically or when suitable substitutes are not readily available. The explanatory statement indicates that the CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO. This instrument was made to ensure that importers and businesses are not unduly burdened by high customs duties on essential goods, thereby facilitating smoother trade operations and potentially lowering costs for businesses relying on these imports.
Scope and Application
The Customs Act 1901, as amended, facilitates the application of tariff concession orders (TCO) to specific goods, thereby altering the applicable customs duty rate. This particular legislation, represented by Instrument TCO No. 1118576, applies to goods specified in the application submitted to the Chief Executive Officer of Customs (CEO) and is subject to the core criteria set out in the Act. The application for a TCO must demonstrate that no substitutable goods are produced in Australia, thereby ensuring that the concession does not undermine domestic production. The geographic reach of this legislation is national, with its application extending across all states and territories of Australia. The instrument itself came into effect on the date the application was lodged, which was 10 June 2011, and it does not retroactively affect any rights or impose liabilities for actions taken prior to its registration. Any person, including importers, who imported the specified goods since the effective date of the TCO may apply for a refund of the duty paid. The Act does not specify exclusions or exemptions beyond those outlined in section 269SJ, which precludes certain goods from being subject to a TCO. The CEO did not receive any submissions opposing the TCO, indicating a smooth process and acceptance of the application’s merits.
Key Provisions
The Tariff Concession Instrument No. 1118576, established under the Customs Act 1901, introduces a tariff concession order (TCO) that applies to specific screws, as stated in section 269F (1). The CEO of Customs can make a TCO if they determine that the application meets the core criteria, which are defined in sections 269C, 269D, 269E, and 269P (3). According to the explanatory statement, the CEO must decide whether the application meets these criteria and, if satisfied, must issue a written order declaring the goods subject to the TCO.
The obligations imposed by this legislation include the requirement for the CEO to assess the TCO application against the specified criteria. If the CEO finds that the application is valid and meets the core criteria, they must make a written order, as stated in section 269P (3). This process ensures that the goods are eligible for the tariff concession, which in this case involves a reduction in customs duty from 5% to free. Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties, as outlined in section 269K (1).
In terms of compliance and enforcement, the Customs Act 1901 does not explicitly mention specific offences, penalties, or consequences for breaching the conditions of a TCO. However, general principles of administrative law and the inherent authority of the CEO under the Act may apply if there is non-compliance with the terms of the TCO. While the explanatory statement does not provide specific maximum penalties, it is reasonable to infer that any breaches could result in administrative penalties, legal action, or other enforcement measures as deemed appropriate by the CEO.
The TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person, as stated in subsection 269S (1). This means that while the TCO aims to benefit importers by reducing customs duty, it does not retroactively affect any rights or impose liabilities for actions taken before the TCO's effective date. Importers can benefit from the reduced duty rate and may apply for a refund of duty paid on the goods since the TCO's effective date, as provided under paragraph 126(1)(r) of the Regulations.